Australia GDP growth likely turned positive in Q3 - RBA's Debelle

Credit: REUTERS/SANDRA SANDERS

Australia's gross domestic product growth looks likely to have turned positive in the third quarter after two back-to-back quarters of contraction, a senior central bank official said on Tuesday.

Adds comments from Debelle, background

SYDNEY, Oct 27 (Reuters) - Australia's gross domestic product growth looks likely to have turned positive in the third quarter after two back-to-back quarters of contraction, a senior central bank official said on Tuesday.

The drag from strict lockdowns in Australia's second-largest state of Victoria was a "little less than first feared" and not enough to pull down overall GDP, said Reserve Bank of Australia (RBA) Deputy Governor Guy Debelle.

Responding to questions from lawmakers at a parliamentary economics committee via video conferencing, Debelle said the RBA's "best guess" at the moment was that GDP growth in the three months-ended September was positive rather than slightly negative.

"The strength elsewhere in the country was more than the drag from Victoria," he added.

"Possibly the drag from Victoria was a little less than we guessed back in August," he said, referring to the RBA's previous quarterly statement on monetary policy.

The RBA holds its monthly policy meeting next Tuesday at which it is widely expected to trim its cash rate by 15 basis points to a record low 0.1% and expand its government bond-buying programme. AU/INT

Australia's economy is in its first recession since the early 1990s as the coronavirus-induced lockdowns forced business to shut down, grounded airlines and rendered hundreds of thousands unemployed.

Debelle declined to comment on the bank's expected quantitative easing programme, saying it was "market sensitive" news.

(Reporting by Swati Pandey and Wayne Cole; Editing by Sam Holmes)

((swati.pandey@thomsonreuters.com; +61 2 9321 8166; Reuters Messaging: twitter.com/swatisays))

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